Stocks Continue To Turn In A Lackluster Performance - U.S. Commentary

(RTTNews) - With traders tacking a break following the recent strength on Wall Street, stocks are turning in a lackluster performance during trading on Friday. Most traders have moved to the sidelines amid uncertainty about the near-term outlook for the markets.

Currently, the major averages continue to linger near the unchanged line. While the Nasdaq is up 0.56 points or less than a tenth of a percent at 3,578.86, the Dow is down 6.88 points or less than a tenth of a percent at 15,454.04 and the S&P 500 is down 2.06 points or 0.1 percent at 1,672.96.

The choppy trading on Wall Street comes as traders seem reluctant to continue buying stocks after the recent strength lifted the Dow and the S&P 500 to new record closing highs on Thursday.

Traders are also digesting the release of a report from the Labor Department showing a bigger than expected increase in producer prices in the month of June.

The Labor Department said its producer price index rose by 0.8 percent in June following a 0.5 percent increase in May. Economists had been expecting the price growth to match the increase seen in the previous month.

Excluding food and energy prices, core producer prices edged up by 0.2 percent in June after inching up by 0.1 percent in May. Core prices had been expected to tick up by 0.1 percent.

The report generated mild concerns about the outlook for inflation and its potential impact on the Federal Reserve's plans for monetary policy.

The mild inflation concerns offset earlier positive sentiment that was generated by better than expected earnings news from financial giants JP Morgan (JPM) and Wells Fargo (WFC).

A separate report from Thomson Reuters and the University of Michigan showed a modest deterioration in consumer sentiment in the month of July.

The report showed that the consumer sentiment index dipped to 83.9 in July from the final June reading of 84.1. Economists had expected the index to come in unchanged compared to the previous month.

Among individual stocks, shares of UPS (UPS) have come under pressure after the delivery giant forecast weaker than expected second quarter earnings. UPS is currently down by 5.5 percent.

UPS cited overcapacity in the global air freight market, increasing customer preference for lower-yielding shipping solutions, and a slowing U.S. industrial economy for the disappointing guidance.

Meanwhile, shares of WebMD (WBMD) have surged up by 25.8 percent after the health information services provider raised its full-year guidance.

Sector News

Most of the major sectors are showing only modest moves, although gold stocks are seeing considerable weakness on the day. The NYSE Arca Gold Bugs Index is down by 1.7 percent, partly offsetting the 7.9 percent gain posted on Thursday.

Profit taking is contributing to the pullback by gold stocks, which comes as the price of the precious metal is nearly flat.

Steel stocks are also giving back some ground after turning in a strong performance in the previous session, with the NYSE Arca Steel Index down by 1.7 percent after ending Thursday's trading up by 4 percent.

While trucking and commercial real estate stocks have also moved to the downside on the day, significant strength has emerged among electronic storage stocks. The NYSE Arca Disk Drive Index has risen by 1.5 percent, reaching its best intraday level in over a year.

Internet, airline, and banking stock stocks are also seeing some strength in mid-day trading, offsetting the weakness in the aforementioned sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Friday. Japan's Nikkei 225 Index edged up by 0.2 percent, while Hong Kong's Hang Seng Index ended the day down by 0.8 percent.

The major European markets also ended the day mixed. While the French CAC 40 Index fell by 0.4 percent, the German DAX Index rose by 0.7 percent and the U.K.'s FTSE 100 Index closed just above the unchanged line.

In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 2.573 percent.